The iPhone 3GS provided several incremental upgrades over its predecessor, but without any significant evolution in overall design. The first three generations share the same external form of the original iPhone released three years ago. In that same period of time, the smartphone market has exploded with a flood of new designs. Although the iPhone 3GS represented the best device on Apple's platform, many of its design elements began to seem dated against the competition. The latest iteration, the iPhone 4, finally brings a leap in design. The device marks Apple's attempt to solidify its dominant stance in the smartphone market, pairing fresh hardware with a major upgrade to the iOS firmware. Our in-depth review takes a closer look at the new design, including the welcome additions and several glaring faults.

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Price: 16GB - $199 or 32GB - $299

The Good

The Bad

Antenna issues

Still AT&T exclusive

No Flash support

Multitasking management sometimes awkward

FaceTime only works with other iPhone 4s

External design and build quality

The iPhone 4 features a completely redesigned housing, with aluminosilicate glass chosen for the facade and back panel. The new form transitions away from the convex plastic body of previous generations, retaining rounded corners but flat on the backside. The device is arguably more attractive and modern than its predecessors, with flat surfaces bringing a 25-percent-thinner profile, measuring 9.3mm, and making the handset even more pocketable. Apple's design team succeeded in producing one of the most attractive and slim smartphones on the market.

The glass surfaces are said to improve durability compared to the plastic housing, which is probably an accurate statement. We did not pocket the phone among abrasive objects such as keys and change, however, so the long-term durability remains to be seen. Both glass panels are tightly fitted to a stainless steel frame, providing a very solid feel but potentially leaving the phone more prone to serious damage from a drop onto a hard surface. The material is certainly of the hardier variety such as Corning's Gorilla Glass.

Display

The new "retina display" is the most significant change to the hardware design, effectively quadrupling the pixel count with 960x640 resolution. After viewing text on other high-resolution screens, such as the Droid's 854x480 panel, the earlier iPhones' 320x480 LCDs seemed downright lacking and outdated. We would have welcomed a display larger than 3.5 inches, however a bigger component would have necessitated a larger housing.

The new display brings the pixel density up to an astounding 326 pixels-per-inch, making the pixels practically impossible to distinguish at normal viewing distances. Text is incredibly sharp and crisp, with small characters appearing to match the quality expected from a printed magazine. Apple has integrated a fantastic display that truly sets the new standard among smartphones. Although many people don't have a problem with their 320x480 devices, using the iPhone 4 will make it difficult to switch back to any lower resolution.

Aside from the increased resolution, the iPhone 4 also utilizes the same in-plane switching (IPS) technology featured in the iPad. The screen is perfectly visible even from extremely broad viewing angles, without losing detail or quality. The company also appears to have removed some of the gap between the LCD surface and the touchscreen glass, which also tends to improve the viewing experience.

While colors on the IPS display do not appear to be quite as vivid as many AMOLED alternatives, representation is still better than a typical LCD. Contrast ratio is also improved, along with readability in direct sunlight. As expected, the oleophobic coating allowed fingerprints and smudges to be easily removed with a swipe across a shirt or other cloth. Keeping the screen clean also helps in bright conditions.

Cameras

Rather than equipping the iPhone 4 with an 8+ megapixel camera sensor, the company outfitted its latest device with a 5 megapixel primary sensor and front-facing VGA camera. It would be easy to criticize the primary camera due to resolution, but it quickly proves itself as a better alternative to many of the higher-resolution options. We think Apple made the right decision by integrating a higher-quality sensor rather than focusing on the pixel count.

Taking pictures with the iPhone 4 produces images that are on-par with many point-and-shoot cameras. Results are not perfect, but it is more difficult to distinguish the images from a standalone camera. Photos do not carry the typical artifacts and noise that make most smartphone pictures easily spotted as the product of a cellphone, although the digital zoom is still essentially worthless.

Without using the integrated LED flash, low-light photographs are still an improvement over most other devices including the previous iPhones. When using flash, we were also surprised by the satisfactory white balance. Faces seemed to keep warm skin-tones without washing out, which is likely due to improved processing or a higher-quality LED in lieu of the cheaper, bluish-tint diodes that are commonplace among other phones.

Pressing the capture button provided consistent results, allowing pictures to be taken without the annoying lag of earlier iPhones. Tap-to-focus also worked quickly and accurately in most situations, although the zoom slider sometimes got in the way on the bottom of the screen. We would have liked to see a hardware button for the camera, although the front-facing camera alleviates the problem of fumbling for a virtual button with the screen facing away during self-portraits.

FaceTime

The front-facing camera has not been included solely to take self-portraits, but rather as a necessary element for video conferencing. Apple labels its system as "FaceTime," which allows users to place video calls over Wi-Fi networks. The company is not the first to bring such technology to handsets, however it is a fresh push from a player known for succeeding where others stumble.

Apple's implementation takes advantage of both cameras, allowing users to quickly switch between the primary camera and front-facing sensor. Moving from a voice conversation to video is also seamless, as FaceTime buttons are provided during the call and in the contacts menus.

FaceTime seems like an interesting and novel feature, but it has been introduced with several limitations. The system currently only works between two iPhone 4s, and both parties must be within range of Wi-Fi. The lack of 3G support is not a surprise and could easily be changed in the near future. Apple will also likely push the feature to additional devices, such as Macs via iChat, which would help bolster adoption. Even if the service is extended to 3G and brought to new platforms, it still might remain more of a novelty than a must-have feature for most people.

Performance

Apple has continued to improve its internal components to maximize performance without sacrificing battery life. Like the iPad, the iPhone 4 uses an Apple-designed A4 ARM Cortex A8 processor. We found the interface to be consistently smooth, even when attempting to push the multitasking functionality. Graphics-intensive apps appeared to be better driven by the new components, while the Web browsing experience was similarly improved with faster page loads. All of the functions remained snappy throughout our tests.

The broad range of sensors has been complemented with a new addition -- a three-axis gyroscope. The component determines slight changes in orientation, in the same way that an aircraft gyroscope tracks pitch, roll and yaw. When combined with the accelerometer input, the gyro expands motion tracking to a total of six axes. Developers have just begun to explore the possibilities of such capabilities. We expect to see a wide range of new content utilizing the gyro, especially augmented reality apps and games.

Surprisingly, Apple has managed to fit a larger battery in a smaller housing than the earlier iPhones. Talk time is now listed as 7 hours on 3G or 14 hours on 2G, while audio playback extends to 40 hours and video playback is claimed to reach 10 hours. The battery is still not swappable, but the extra capacity is a welcome compromise. Our limited tests seemed to fall in-line with Apple's promises, even with the brightness set high.

Video

Users can now shoot video in 720p resolution with the iPhone 4. The capability is another welcome addition, helping to eliminate the need to carry a Flip or similar device alongside a smartphone for casual recording.

We did not find the iPhone's video recording capabilities to greatly exceed that of other small HD-capable devices, although it was close enough to serve as a replacement. The sensor seems to deal with low light and motion better than the alternatives, while the Flip provides better results when shooting scenes that have a mix of bright areas and darker regions.

Microphone placement on the iPhone 4 gives the device an edge when recording video in extremely loud environments such as concerts. A Flip does not provide an easy way to attenuate the sound levels, resulting in overloaded input and terrible clipping. Covering the microphone port on the iPhone 4 helps to bring the sound level down. While adding an accessory mic such as Blue's Mikey will provide a much more effective solution, the standalone iPhone is capable of recording audio that is not excruciating to listen to.

Videos shot on handheld devices typically need to be transferred to a computer for further editing. Apple has provided an on-the-go solution with iMovie for the iPhone, which offers a range of basic editing tools. Users can use multi-touch gestures to arrange or trim clips and still photos, while the interface provides additional options for adding themes, soundtracks and titles.

The mobile version of iMovie is another sensible adaptation of Apple's desktop software for the company's mobile devices. Capabilities are fairly limited, but the software shows the potential to become a relatively versatile app. Exporting is easy, with options to share movies via e-mail, SMS, MobileMe or YouTube. We were frustrated with the lack themes and a project export option, which prevents users from starting a project on the iPhone and finishing it with the desktop software.

Phone functionality

During testing, we did encounter the "death grip" reception issues that have been widely reported. In an area on the outskirts of AT&T's EDGE coverage, the device consistently showed four reception bars while placed on a table. Picking the phone up with fingers covering both black bands at the bottom of the frame resulted in a completely dropped signal, forcing the phone to search for a network. In a bigger city, well covered by 3G service, we were able to replicate the drop in bars but the phone still remained connected to the network and properly functioning.

Apple suggests the issue is a software problem rather than a poor antenna design. The company correctly points out that signal attenuation is common to all wireless phones that are gripped in certain ways, however the iPhone "death grip" is likely to be the natural posture for many users.

We are somewhat skeptical that a software update will completely resolve the problem. Even if the phone misrepresents the signal strength on the interface, it should not completely lose communication with the towers. We encountered a tangible drop in call quality, and many dropped calls, when using a natural grip that covered the left band with a ring finger and placed the right band at the base of a thumb.

Being aware of the antenna issue, we were able to alleviate the problem by gripping the device further toward the top. This was not an awkward position or uncomfortable, just difficult to make into a habit. It remains to be seen if the software fix will actually address the dropped calls. Apple recommends using a case, which will probably help maintain signal strength but seems like an absurd requirement for the phone to work properly.

When the phone was held correctly, the call quality was excellent. Apple added a second microphone near the headphone port to help alleviate background noise. People on the other end of the line did not have trouble hearing the iPhone output even in windy and noisy conditions. The speakerphone also seems louder and better tuned to voice playback than earlier iPhone generations.

iOS 4

Apple renamed its iPhone OS and finally added several key features that users have been waiting for. The new iOS 4 update brings multitasking, folders, FaceTime, new background options, and several other new capabilities.

Multitasking is the crown jewel of the updated software, representing Apple's answer to alternative platforms such as Android. Steve Jobs has been vocally critical of Google's approach to multitasking, while promising that iOS 4 brings a new way to handle such operations.

iOS 4 provides a quick way to manage the running processes, with an icon bar that pops up after a double-press of the home button. Users can then kill apps by holding down an icon until it begins to shake, in a similar way to rearrangement on the home screen. The management bar is easier to access than Android's menu, which is buried further into the interface. It also provides basic iPod playback controls without leaving apps.

Despite providing quicker access to the app switcher, iOS 4 adds more time when trying to completely close an app. Pressing the home button sends each app to the background, where they quickly stack up. If an app is still active in the forefront, a double press brings up the multitasking bar but without showing an icon for the active app. Users must first press the home button once to send the active app to the background, then go back into the manager to kill the app. Adding the active app icon to the management tray seems like a sensible way to eliminate one step from the process.

iOS 4 maintains fairly tight control over which processes are allowed to run in the background. To save resources, only seven simultaneous services can be run at one time. This does not stop users from piling up even more apps in the multitasking tray, but the most recent apps will have top priority. The software automatically suspends apps that should not be utilizing resources in the background.

We did not encounter any problems with significant battery drain when using the multitasking features. The approach is slightly different than Android, but not necessarily better in every way. The management bar quickly becomes cluttered with many apps that do not actually use multitasking functions and hardly benefit from fast switching. Android presents sensible multitasking apps, such as Pandora, in the notification tray for quick access. We can't say that one is better than the other, as both offer unique styles that will suit different tastes.

Users can now create folders for certain groups of apps. This is another late addition, but we're glad to finally see it. Folder creation is simple and straightforward, allowing users to drag one app onto another and then add more content if necessary. The OS automatically generates names, but users can easily edit the suggestions. The feature finally provides a way to organize the home screens and create distinct groups for different items such as games and utilities.

Mail has also been revamped with several new options, including e-mail threading and a unified inbox. Users can delete from the search results, choose different apps for incoming attachments, or resize images that are to be sent as attachments.

Final thoughts

Competition between major handset makers has continued to escalate, especially in the smartphone arena. While the wildly popular App Store has continued to shine as a dominant force behind Apple's mobile platform, the iPhone 3GS brought only minor upgrades and the v3 firmware still lacked multitasking capabilities and other essentials. Apple stepped up to the plate and delivered the iPhone 4 and iOS 4, bringing the anticipated functionality and several new features that can't be found on any other smartphone.

The 960x640 display raises the bar for high-end displays, making the iPhone 4 the best choice for reading Web content or other text. The slim design and glass construction provides a much-needed facelift, while the gyroscope opens the door to new possibilities for apps. Video calling and 720p recording are great additions, even if both features will be fairly common on other high-end smartphones this year.

We like the new design, but the "death grip" reception issue could be a deal breaker if iOS 4.0.1 fails to provide a complete remedy. Many potential customers may still be hesitant to make the jump to AT&T, especially if the antenna problem is left unresolved. The lack of Flash support also remains a frustrating omission on a device that boasts of a complete Internet experience.

For existing iPhone owners satisfied with AT&T and tolerant of the drawbacks of a closed platform, the iPhone 4 offers a long list of reasons to upgrade. Anyone holding out for a Verizon offering may be tempted to wait just a bit longer, however.